Retailers on the future of Modi’s ‘Make in India’

Launched on September 25, 2014, the Make in India initiative aims at promoting India as an important investment destination and a global hub for manufacturing, design and innovation

Foreign Direct Investment in the country increased by 29 per cent after the launch of ‘Make in India’ initiative

Industry leaders are hailing the Government’s flagship programme, saying the initiative is critical to the country’s growth as it gives boost to the manufacturing industry and generates employment. Nonetheless, stalwarts from the retail industry say that if India does not catch up with the rest of the world on the technology front, the Make in India programme would all but fail miserably.

Founder and MD, Urban Shore London, Sonita Unadkat says, “The Make in India program is quite interesting as India has a number of fashion-led designs that can be spoken about which are regional. When I look at footwear, Make in India may not be a success here as it does not necessarily have the right technology.”

CMD, Metro Shoes, Rafique Malik adds, “What the Government really needs to do is to create an enabling environment for Make in India to be successful. You have labour here, but productivity is low. An enabling environment is going to be the spark that will ignite the Make in India endeavour. As far as infrastructure is concerned, taxation, and labour laws will play a vital role in making the Indian manufacturing industry competitive. We also have to invest in technology. We have started a journey and the Government should really take it ahead and make sure all the components are in place to ensure Make in India is a success.”

Why Make In India

The major objective behind Make in India is to focus on job creation and skill enhancement in 25 sectors of the economy.The initiative also aims at high quality standards and minimising the impact on the environment.The initiative hopes to attract capital and technological investment in India.

Before the initiative was launched, foreign equity caps in various sectors were relaxed and the application for licences was made available online and the validity of licences was increased to three years.

In August 2014, the Cabinet allowed 49 per cent FDI in the defence sector and 100 per cent in railways infrastructure. The defence sector previously allowed 26 per cent FDI and FDI was not allowed in railways. This was in hope of bringing down the military imports of India. Earlier, one Indian company would have held the 51 per cent stake, this was changed so that multiple companies could hold the 51 per cent stake.

The Results

A “Make in India Week” event was held at the MMRDA Grounds at the Bandra-Kurla Complex in Mumbai starting 13 February 2016. The week long multi-sectoral industrial was attended by 2500 international and 8000 domestic, foreign government delegations from 68 countries and business teams from 72 countries. 17 Indian states, mostly BJP-ruled, also held expos.

At the close of the event, then DIPP secretary Amitabh Kant stated that it had received over Rs 15.2 lakh crore ($230 billion) worth of investment commitments and investment inquiries worth Rs 1.5 lakh crore ($22 billion). Maharashtra led all other states receiving Rs 8 lakh crore ($120 billion) of investments.

Between September 2014 and November 2015, the government received Rs 1.20 lakh crore ($18 billion) worth of proposals from companies interested in manufacturing electronics in India.

24.8 per cent of smartphones shipped in the country in the April–June quarter of 2015 were made in India, up from 19.9 per cent the previous quarter.

In February 2016, Lockheed Martin stated that it was “ready to manufacture F-16 in India and support the Make in India initiative”, although it did not announce any time frame.

Foreign Direct Investment in the country also increased by 29 per cent for the 15-month period – ended December last year – after the launch of ‘Make in India’ initiative.

Carlyle, the world’s second largest private equity fund has ranked India as the most attractive investment destination in the whole world, offering the highest expected returns on incremental capital over the next four years.

Retail experts are unanimous in saying that Make in India will be a success and India will be a leading world power soon, but only if it makes a concerted effort to achieve multi-dimensional success – building infrastructure and sustaining democracy by accommodating diverse ambitions of the people.